Buffett says global economy slowing, wants more deals

Wed Oct 24, 2012 8:58am EDT

Berkshire Hathaway CEO Warren Buffett attends the Allen & Co Media Conference in Sun Valley, Idaho July 12, 2012. REUTERS/Jim Urquhart

Berkshire Hathaway CEO Warren Buffett attends the Allen & Co Media Conference in Sun Valley, Idaho July 12, 2012.

Credit: Reuters/Jim Urquhart

(Reuters) - Warren Buffett sees clear signs that the global economy is slowing, although the U.S. economy is "inching ahead" as other regions decline, the Berkshire Hathaway chief executive officer said on Wednesday.

Yet despite the weakness, Buffett said he was "salivating" to make another major acquisition, adding that two deals of around $20 billion each had fallen through this year.

In an interview on CNBC, Buffett said the rate of decline was larger in Asia than in Europe, although the Asian economies are declining off a higher base.

At the same time, he said Berkshire's U.S. housing-related businesses were growing at double-digit percentage rates of late.

Buffett has maintained that the economy will not truly start to turn around until the housing market improves, and he said Wednesday that housing had clearly started to turn.

Berkshire is heavily exposed to housing construction, as it owns a brick maker, a carpet maker, a realtor and the largest builder of manufactured homes.

Yet even with growth from its existing portfolio companies, Berkshire is always on the hunt to expand by acquisition.

Buffett told CNBC: "I'm salivating" to spend some of Berkshire's $40 billion cash pile on a deal. At Berkshire's annual meeting in May, he said a $20 billion deal had recently fallen through, and on Wednesday he acknowledged a second one had come apart as well.

He did not give any indication as to what kinds of companies were involved.

In a wide-ranging interview from an event in Ohio, Buffett also said the best thing for the economy would be for U.S. Federal Reserve Chairman Ben Bernanke to stay on for a third term.

With the presidential race running neck-and-neck, there has been speculation of late that Republican candidate Mitt Romney, if elected, would seek a new Fed chairman when Bernanke's term expires in 2014. Buffett disagreed with the idea.

"I would vote for Bernanke again, and I'd get my kids out and everybody else to vote for him," he said.

(Reporting by Ben Berkowitz; Editing by Maureen Bavdek and Lisa Von Ahn)

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Comments (3)
Prairiefire wrote:
Here is a guy who have 40B to spend and can find no takers… Times must be a booming in these here USA if everyone is pat and needs no money.. Guess the charade is over and the economy is better off than the Republicans will lead you to believe… And I believe this is the same guy who said that he and the rest of the super rich should be paying more income tax.. Imagine that..

Oct 24, 2012 9:56am EDT  --  Report as abuse
Rich_F wrote:
Praoroefire when you get a clue please post again, until then leave it up to the informed. Corporations and the wealthy are flush with cash because the Fed is pumping cash into the system. The problem is and continues to be the Fed can’t decide where it gets placed. In the end it won’t matter as debt destruction far outweighs the Fed ability to pump free money into the system.

Oct 24, 2012 4:34pm EDT  --  Report as abuse
Willie12345 wrote:
So what is the value of our currency now, if compared to gold and oil……. say about 1980 ? 1/2 ? 1/4 ?

Oct 24, 2012 4:56pm EDT  --  Report as abuse
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